Network natter

From the fisherman on the high seas to the vegetable vendor on the street to the businessman in his high-powered office, the mobile phone has become the medium of the masses and the great equaliser.

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Sunil Bharti Mittal

December 20, 2007

ISSUE DATE: December 31, 2007

UPDATED: December 29, 2007 13:03 IST

60 REVOLUTIONS — MOBILE PHONES

The mobile revolution is less than a decade-old but one doesn’t have to go very far back in history to witness the rationing of telephones. In the early ’90s, one waited for years for a phone connection.

Today, as more than seven million mobile customers enter the networks every month, the long wait seems a distant memory. For me, this explosive telecom growth encapsulates India’s transformation into a resurgent economic power.

My tryst with the telecom sector began as a telephone manufacturer in the mid ’80s, when handset manufacturing was opened to the private sector for the first time. But mobile telephony was different. Growth was sluggish.

It took three years for the mobile subscriber base to cross the millionmark in 1998 and it was tough for operators. Out of the 25 early entrants, only three survive. Most of them sold out, a few collapsed, and some merged to form bigger players.

Competition meant that operators dropped tariffs, despite facing extinction. Rates dropped from 20 cents (Rs 8) a minute to less than two cents (80 paise) a minute, the lowest ever witnessed anywhere in the world. Operators experimented with tariff plans. Payment plans like life-time prepaid managed to rope in the notso-well-off consumers into the network and the prices of handsets fell.

Two old men with a mobile phone in a village near Lucknow

Low tariff created a challenge of survival for operators. At Bharti Airtel we innovated our business model to meet the low tariff challenge. In 2004, we struck remarkable outsourcing deals. We put in the hands of IBM everything from the desktop on the CEO’s desk to the most complex piece of IT.

It was a $750-million contract for a period of eight years. We also outsourced our networks from Ericsson and Nokia. We told them that we wouldn’t be paying for the hardware they install. We would rather be paying for the traffic that comes out of these networks. It was a unique and unusual model, obviously risky, but having the potential to open up new frontiers in telecom network management.

Did you know?

10 croretelephone connections were installed in India in 2005, of which 5.23 crore were of mobile users.

70 lakhsubscribers are added every month in India, ahead of China which adds 45 lakh every month.

The device’s innovative use has also fuelled its growth. From SMSes to music downloads, it has become more versatile than the fixed line voice-only phones of the early years. At that time, telecom growth was hampered by an elitist bias. A telephone connection was treated as a preserve of the rich. No wonder then that the subscriber base, which was 80,000 in 1948, moved to a mere five million by 1991, the year India kicked off its historic journey towards the market economy.

Now, in a matter of just 10 years, the subscriber base has grown from 15 million in 1997 to over 220 million. But for me, it’s more than a mere ‘connectivity revolution’. It has improved the income and social status of a huge section of society. Selling at village pan and kirana shops like pouches of chewing tobacco, mobile connections constitute modern India’s most powerful movement that touches the lives of the ordinary and the powerful in the same fashion. It’s gratifying to play a role in this.

The writer is the chairman and CEO of Bharti Enterprises.

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